Freelancers’ Questions: How to get paid the other half of my fee?

Freelancer’s Question: My invoice along with payment due date has been sent and
nothing’s come back, even though the due date’s now passed. I emailed the
client a polite reminder but still
didn’t receive a response. I will send a third late payment letter to the client, who’s
overseas, but then how should I proceed?

They’re a good client in a niche area so I
don’t want to upset them. But what complicates this is that although 50% of my
fee’s been paid up front, the remaining 50% (in a few instalments) will only be
paid once I release the work I’ve done to a freelance designer,
who I’ve partnered with for this assignment (and others previously).

I have a good relationship with him, so I could
call him up and let him know what's happening. I certainly won't authorise the
client to use my work if I'm not paid for it; the license doesn't become theirs
until it's all been paid for. I could also send a late payment notice or a
notice that the outstanding balance will go to collections. The
overseas location might make monies hard to collect though. Is there a way I
can get my money without resorting to escalating the situation?

Expert’s Answer: When an expected payment date passes with little or no
contact from the client it can be more than a little disconcerting, especially
if the client in question has traditionally been a valued customer and more
importantly, a prompt payer. But it
isn’t unusual in our experience for clients to pause or delay progressing a
project for any number of reasons without necessarily feeling they have to keep
all the freelancers ‘in the loop’ as to the latest developments. That said, you
are right to look to the implications for your own cashflow should the worse
happen.

Luckily the fact you have a good relationship with the
designer means you are in an excellent position to keep abreast of both current
developments and crucially any issues or problems that occur
afteryour part in the process has ostensibly ended. As for how to proceed, you
do have a number of options available to you currently that do not require any
kind of formal escalation to debt collection or legal action.

You say that the remaining 50% of the fee is due to be paid
in instalments once assets are released to the designer, but unfortunately you
do not state if this has already happened.
For the purposes of the following two recommendations, we will assume the
work
has not already been placed
with your designer colleague. In addition, the following solutions are provided
on the assumption that your contract allows for them. Please
check
your contract carefully to ensure you are free to pursue these steps, as
some contracts explicitly state what action must be taken in the event of
non-payment.

Solution one – this is the simplest and offers the most
immediate resolution and it involves picking up the phone and calling the
client (time zones permitting) to find out exactly what the current state of
play is. You can use the call as a customer service call initially, to confirm
they are happy with the work done and that everything is progressing as it
should. If it is, then this gives you the perfect opportunity to bring up your
payment terms and the like.

If this picking up the phone options isn’t possible, or you
can’t reach the decision-maker, then your next best option -- Solution 2 -- may
be to just do nothing and wait for the end-client to come back to you. If the
work hasn’t been passed on to the designer then presumably they will contact
you to discuss the next step. You can legitimately state you were unsure of how
to proceed given you had previously received no response to your emails. Again,
this gives you the chance to sound out the client for any potential pitfalls
that may impact your own payments. Once the client has been in touch and
assuaged your fears, you can then move forward.

However, if you have already passed the assets across to
the designer then that does put a different spin on the situation, as you now
have a client ignoring you for work completed at the point they feel they no longer
‘need’ your services. At best, this demonstrates a lack of respect, at worst it
can be an indicator that this client already intends to try and avoid or
otherwise ignore your legitimate payment demands.

In this case, we would suggest you contact the designer as
a matter of urgency to see if they have any details you do not. It is possible
some internal reorganisation at the clients end means your emails are now going
to the wrong place or person. If the work continues apace, and it is only
your
emails that go unanswered, then you need to take steps to safeguard both your
intellectual property and cashflow.

In the first instance, we would suggest you call the client
as outlined above (Solution 1) and make strenuous efforts to confirm your
payment is free of queries and that it is being processed. If not provided,
press for a firm date of payment from the client and confirm this in writing (on email) if
possible.

If that doesn’t work then explain the situation to your
freelance colleague and ask for their help. Chances are if you are struggling
to secure payment now then the designer will eventually be faced with the same
problem. Plus, as the old adage goes “a problem shared is a problem halved” and
that is especially true in cases like this.

If the designer is willing to assist, we would suggest
sending a formal notice by email reiterating that the IP
does not transfer until payment is made in full, and back this
claim up by including the relevant contractual clauses. Copy in the designer
and make it plain that you retain the IP and will robustly defend its ownership
until such time as payment is made. If
your designer is willing they can then ‘down tools’ in response to this email in
order to avoid infringing on IP you still own.

This may be enough for the client to make payment as the project
is effectively stalled. However conversely, you and your colleague may then find
yourselves in exactly the same position as far as securing payment goes, and
there is potentially little stopping the client from finding someone else to
finish what the designer has already started.

Failing that, your options to pursue payment without
escalation are limited. You could try negotiating with the client but if they
are already ignoring your legitimate requests for payment and ownership of the
IP, how much leverage you have without resorting to an expensive copyright
claim is open to debate.

Whilst we appreciate you have no desire to upset a valued
client, it should be possible to pursue payment using a professional and
respectable agent without this action having a detrimental impact on the
relationship. But practically speaking, would you really grant further credit
to a company you already knew from experience to be poor payers?

Keep in mind -- reputable agencies usually charge a
percentage-based commission that is payable on success, but most will
not require you to sign a binding
contract or pay any fees in advance. Generally we would advise steering clear
of any agency that promises the world in return for an up-front payment, as in
our experience these claims never seem to hold water and those paying the fees
never get refunds. Good luck.

The
expert was Adam Home, a manager at Safe
Collections, a debt recovery agency that specialises in serving freelancers
and the self-employed.